Stem cell clinic class action lawsuit settled for $3.65 million

A long-running legal dispute between a US stem cell treatment provider and their unsatisfied customers has reached a settlement.

A total of $3.65 million will be paid to 1063 of their former patients. The lawsuit was originally filed in 2016 on behalf of patients who felt that the StemGenex clinic's claims of '100 percent consumer satisfaction' in the marketing of its stem cell treatments were misleading. The former patients had sought treatment for conditions such as lupus, diabetes, multiple sclerosis, and spinal cord injury; however, none 'received any significant benefit' from the procedure.

'This was not an ordinary consumer case', Elizabeth Banham, one of the lawyers for the patients, told the LA Times. 'The plaintiffs suffered from a variety of painful and often degenerative conditions for which they paid a lot of money for a stem cell treatment based on the defendants' marketing.'

The StemGenex treatment involved removing fat cells from patients and treating them to concentrate the stem cells from the tissue, before injecting the cells back into the patient. The clinic's promotional material claimed that the treatment was effective against conditions including Alzheimer's disease and Parkinson's disease, and quoted a high patient satisfaction rate based on interviews conducted shortly after fat cell harvesting, before the results of treatment could be felt.

The settlement meant that each plaintiff received $1936 from the settlement fund (despite having paid around $14,900 per treatment), with the majority going to legal fees and expenses. StemGenex and its former chief medical officer, Dr Andre Lallande did not admit any wrongdoing.

StemGenex came under scrutiny from the US Food and Drug Administration (FDA) in 2018 for the illegal marketing of an unapproved cellular-based product. The FDA expressed concern there was insufficient scientific evidence to support that the type of treatment offered by the company. Although the FDA has approved stem cell treatments for some blood-related conditions, the agency still advises consumers against accepting any other claims for stem cell therapies.

StemGenex subsequently declared bankruptcy and the settlement reached was with their insurers. Following this case and another multi-million dollar judgment against a stem cell treatment provider in New York last year, Professor Paul Knoepfler, a stem cell researcher at University of California Davis School of Medicine, Sacramento, said:

'Given such financial risks, how can the hundreds or thousands of [stem cell] clinic doctors across the USA still keep getting malpractice or business insurance that they need to continue? At some point, insurance companies are probably going to stop covering this industry.'